Exporters seek permission to operate factories in pandemic times

FIEO asked for extension in pre- and post-shipment credit by a minimum of 180-270 days, waiver of PF/ESI charges for all industry from March to June 2020 as industry will bear the wage cost during the period of lockdown with no or less business affecting their liquidity.

Exporters are asking for a host of steps such as allowing
them to operate their factories with minimum workforce, subsidy on interest
rates, and extension of incentive schemes in order to deal with the coronavirus
crisis.

These demands
were raised during a video conference meeting called by Piyush Goyal, minister,
commerce and industry. The minister
spoke with representatives from various export promotion councils (EPCs) from
across the country, to assess the impact of coronavirus and lockdown in the
country.

The councils
apprised the impact of the pandemic on their activities and businesses, and
made a range of suggestions to overcome the hardships.

“Export-import is
an important activity of the country, and at the same time, lockdown was
necessary for the safety and health of 130 crore Indians. So a fine balance has
to be maintained and solutions found to reduce the difficulties,” said Goyal.

He said the
suggestions made in the conference will be taken up in right earnest and action
will be taken soon. He assured the councils that the government will try to be
accommodative with their reasonable demands, and come out with practical
outcomes.

During the
meeting, the Federation of Indian Export Organisations (FIEO) suggested that,
all manufacturing companies in exports should be allowed to operate with 50 per
cent of the manpower with full sanitation and safety with social distancing
norms as loss in exports will result in market loss which will be extremely
difficult to recover.

Ajay Sahai,
director general, FIEO, said, “Our loss will be China’s gain which is using all
means to gain greater market access with increased incentives.” The other
recommendations made by them include extension of the Foreign Trade Policy
2015-2020 by one year, extension of interest subsidy scheme for 2020-25 with
effect from April 1, 2020, amnesty scheme for regularisation of default by
payment of only customs duty without interest and penalty to lessen the burden
on industry.

Sahai also said
that, all agencies involved in exports and imports including customs, freight
forwarders, transporters, shipping lines, courier companies, plant quarantine,
certificate of origin issuing agencies should function with minimal staff,
since if one of them is not functioning, the export-import chain is broken.

FIEO asked for
extension in pre- and post-shipment credit by a minimum of 180-270 days, waiver
of PF/ESI charges for all industry from March to June 2020 as industry will
bear the wage cost during the period of lockdown with no or less business
affecting their liquidity.

Ludhiana-based
exporter S C Ralhan suggested that, fixed charges levied may be waived and
industry may be charged only on the actual consumption of electricity and
immediate refund of IGST will help exporter in dealing with liquidity issues.

“These measures are important for the export sector as it
contributes significantly in the country’s economic growth. Without these
measures, the sector will face major problems,” said leading footwear exporter
and chairman of Chennai-based Farida Group, Rafeeq Ahmed.

Export Promotion
Council for SEZs and EOUs, vice chairman, Bhuvnesh Seth said that, steps need
to be taken for special economic zones and export oriented units (EOUs). He
pitched for extension of income tax benefits and other incentives till March
next year, continuation of MEIS export incentive scheme and zero rent at least
for MSME for lockdown period.

“In view of lockdown, we humbly request for extensions of
sunset clause for SEZs till March 31, 2021, direction should be given to clear
import containers or demur-rages applicable of shipping companies or ICD
(Inland Container Depot) to be waived off during the lockdown period. Units
export consignments worth crores are palletised ready to stuff in containers
for dispatch with time-bound delivery. Request to issue instructions to MHA
(Ministry of Home Affairs), state governments and customs to move such
containers for dispatch,” he added.

The organisations that took part in the video conference
included from sectors such as leather, apparel, sports, electronics, telecom,
silk, gems and jewellery, cashew, and plastics.

Despite exports and imports growing at the same rate of 9 per
cent, India’s trade deficit reached a record high of US $176 billion
in 2018-19. According to data released by the commerce and industry
ministry on Monday, exports stood at US $32.55 billion in March,
taking the total tally in 2018-19 to US $331 billion.

Major group of
exports are organic and inorganic chemicals, engineering goods, textiles, drugs
and pharmaceuticals and petroleum products.